Pluristem Vs. Geron: An Insider's View Of The Stem Cell Story

A few weeks ago, Geron (NASDAQ:GERN), the world's first company to conduct clinical trials using human embryonic stem cells, announced that it was halting its stem cell research to focus its research and development resources on other areas. While Geron reported that the shift away from its stem cell business was not the result of poor clinical trial data, the move was widely seen as a setback for the overall stem cell pharmaceutical industry, as it leaves only a few companies still conducting clinical trials involving human embryonic stem cells.

Embryonic stem cell-based therapeutics hold great promise because of the unique ability of those cells to "morph" into any of the approximately 220 cell types in the body, providing researchers with hope that one day these cells might be used to replace or repair damaged tissue in patients suffering from chronic heart disease, Parkinson's and stroke. However, because of political and ethical controversies as well as economic uncertainties, many pharmaceutical companies are hesitant about trying to develop therapies using embryonic stem cells. The news that Geron has now left the picture has only further darkened the mood among stem cell research supporters.

There is, however, another approach today that both captures the promise of embryonic stem cell treatments and eliminates the ethical and political controversies inherent in harvesting embryonic cells. Additionally, and more importantly, this approach has proven to be safe in treating debilitating conditions, such as vascular and heart disease.

In part, this approach is being led by Israel-based Pluristem Therapeutics (NASDAQ:PSTI), the company of which I am CEO. Rather than harvesting cells from the human embryo, Pluristem takes its cells from the human placentas, following a full term birth of a child, thereby avoiding the need to destroy live embryos.

Unlike the outlook for embryonic-based therapeutics, the future for placenta-derived therapies, such as those manufactured using our proprietary 3D manufacturing technology, looks bright, and I would like to outline the reasons that I believe a placenta-based approach will ultimately prove to be effective for patients, attractive for investors and most importantly, valuable for the world.

Source of cells: Embryonic stem cells (Geron's approach) vs. Placenta-derived adult stem cells (Pluristem's approach). While embryonic cells possess a high level of plasticity properties that enable researchers to manipulate them into different types of cells such as osteocytes (bone), chondrocytes (cartilage), neurons (nerves) and adipocytes (fat), those cells can also become cancerous due to those same high plasticity features. On the other hand, adult stem cells harvested from placentas can be used to treat a variety of diseases. Based on tests conducted by Pluristem both using animals and humans, placenta-derived cells do not carry the danger of becoming cancerous once injected into a patient. Additionally, our clinical trials have already proven placenta-based cells to be not only safe, but potentially effective as well in lowering the amputation rate and improving quality of life among patients suffering from Critical Limb Ischemia (CLI), our first therapeutic indication.

Mechanism of action: As far as we know, Geron used the "Differentiation, Integration and Regeneration" approach, while Pluristem is one of the pioneers in what it calls "Self-Tissue Regeneration." The "Differentiation, Integration and Regeneration" approach required Geron to engineer its cells into specific cell types and then inject those cells into the patient, such as it had been doing in its trials with spinal cord injury patients. Following the injection, cells were supposed to integrate into the patient's body and become "new body parts." Unlike Geron's embryonic cells, Pluristem's placental-derived cells (termed PLX cells) serve as biologically-controlled drug delivery systems that are capable of secreting various therapeutic cytokines and other soluble factors in response to environmental signals within the patient's body. This means that Pluristem's therapeutic drugs will be able to help the body heal itself. One example of our "Self-Tissue Regeneration" approach is angiogenesis, in which PLX cells promote the growth of new blood vessels from pre-existing vessels.

Diversified Line of Products: While embryonic stem cells possess the ability to become different types of cell in the body, we believe that our manufacturing approach will enable us to produce a comprehensive distinctive line of "off-the-shelf" products that will need no matching prior to administration. Pluristem grows its cells in a patented bioreactor system, providing a three-dimensional microenvironment, giving us the ability to manufacture an array of products with batch-to-batch consistency (unlike cells which are grown in traditional two-dimensional (2D) environments, such as petri dishes, as currently used by all other stem-cell development companies, limiting their ability to develop a diverse product line with consistent batches. Our goal is to successfully develop various products, with specific characteristics, for the treatment of many diseases. From a reimbursement point of view, in the future, each product could receive a specific reimbursement code, thus further boosting the value of our company.

Manufacturing capabilities: As mentioned above, most stem cell development companies use petri dishes or tissue flasks to grow their cells. We believe however, that in order to both become successful in cell therapy commercialization, as well as properly treat millions of patients who suffer from different diseases, companies must not produce trillions of cells using traditional methods of growing cells. With our approach, from just one placenta we can manufacture enough PLX cells to treat 10,000 patients-- a yield rate that is unmatched in the industry. Our new facility, which we expect to complete by the end of 2012, will have the capacity to produce PLX cells for the treatment of more than 150,000 patients annually suffering from a number of serious diseases.

Niche market vs. mass market: As we discussed, the first embryonic cell therapy that Geron had targeted was for the treatment of spinal cord injuries. The total number of patients around the world who could have potentially been treated with their product was approximately 30,000. Pluristem, on the other hand, develops products for mass market, for millions of people around the globe. Our lead product candidate, PLX-PAD, is targeted for patients with Critical Limb Ischemia (CLI), the end stage of Peripheral Artery Disease. This market alone has more than 20 million patients in the U.S., and is consistently growing year after year. Additionally, our pipeline includes products for the treatment of various diseases, including other stages of Peripheral Artery Disease (such as Intermittent Claudication), skeletal muscle injuries, pulmonary hypertension, autoimmune diseases, such as inflammatory bowel disease and multiple sclerosis, as well as for diseases that affect the nervous system, such as neuropathic pain and ischemic stroke, in addition to others. In all, we anticipate that within the next few years, our products will be treating diseases with a cumulative market potential of billions of dollars per year.

“Off-the-shelf Product”: As opposed to products being developed by other companies that require cells to be taken from patients, processed, and then returned to that patient, Pluristem's product candidates are being developed from medical waste as “off-the-shelf” products, meaning that our PLX cells possess immune privileged properties, uniquely positioning Pluristem to treat millions of patients around the world without the need to perform a "match" between a patient's tissues and the donor's tissues. Our exclusive out-license agreement with United Therapeutics Corporation (NASDAQ:UTHR), for the use of Pluristem’s PLX cells to develop and commercialize a cell-based product for the treatment of Pulmonary Hypertension (PH), is an excellent example of the potential PLX cells have to become the “engine” towards the development of many successful cell therapy products.

As I mentioned above, the first therapy that Pluristem is working on is for the treatment of CLI – a disease which leads to more than 160,000 major limb amputations per year in the United States alone. Current data suggest that approximately 20% of those patients will die within the first 6 to12 months from the onset of the disease, and many will require amputation within six months of diagnosis. Approximately half of diabetes patients diagnosed with CLI will experience a major amputation following diagnosis, and many will undergo a second amputation within 3 to 5 years.

The overall U.S. hospitalization and amputation rate associated with CLI has increased since 1985, suggesting a growing incidence of CLI and substantial unmet medical need to improve outcomes for these patients beyond conventional treatment. All this adds up to a total annual cost of $10 -$20 billion for the treatment of CLI in the U.S. Economic modeling indicates that even a 25% reduction in amputations has the potential to create annual savings for the U.S. health care system of up to $3 billion a year. And that is only a conservative model for one indication.

Placenta-derived stem cell therapy has an opportunity to impact the world, and it is important for our community of patients, doctors and shareholders to be clear that we are not only working toward something significant, but we believe that our approach, as outlined above, will enable us to achieve the goals we have set for our company.